Max Wiley | 2025 I.S. Symposium

Name: Max Wiley
Title: Buying Wins: Determining the Optimal Salary Cap Allocation Strategy in the NFL
Major: Statistical & Data Science
Minor: Economics
Advisor: Jake Murphy

In the NFL, teams are forced to make strategic decisions about how to allocate money across players and positions while adhering to the salary cap. This study offers a data-driven perspective on this challenge by modeling the relative importance and return on investment of each position. Non-linear optimization is utilized to maximize expected wins by incrementally allocating cap space to positions with the highest marginal benefit. It is concluded that, between 2019 and 2023, the largest cap investments should be directed towards linebackers, the defensive line, and wide receivers. The model suggests a surprisingly low allocation to quarterbacks due to the widespread success of young quarterbacks on rookie contracts during the time-frame being studied. In addition, when investing inexpensive star players, teams should prioritize the wide receiver and cornerback positions to improve overall performance. While adhering to the optimal allocation strategy provided some competitive benefits, the most successful teams during this time-frame took advantage of market inefficiencies by signing players that over-performed relative to their pay. The most effective way to do so is through the NFL draft, highlighting the importance of scouting and player development in franchises.

Posted in Symposium 2025 on May 1, 2025.